1. Field Of The Invention
The present invention generally relates to a keypad for human interaction with a computer system for automated real-time trading of securities such as stocks, bonds, commodities and Government securities.
2. Prior Art
Every day, a modern securities exchange or trading market provides a forum for completing transactions worth millions of dollars, constituting hundreds of millions of shares, all executed at a frenetic pace. As computerized electronic communications systems have increased the speed b which information is transferred, stock and securities trading transactions have likewise accelerated. Consequently, investors now desire instant response to a rising or falling market.
A variety of market trading methods have been used in the prior art. For an informative discussion of these methods see U.S. Pat. No. 4,412,287 (Braddock, III).
In the market for trading United States Government-issued securities, including Treasury bills, Treasury Notes, Agency Bonds, Municipal Bonds, Currencies, and other securities (each designated an "issue"), market operations heretofore have been completed manually. Government securities are classified in three basic groups: Treasury (such as Treasury bills), agency (mostly Government-sponsored enterprises such as the Student Loan Marketing Association), and mortgage-backed. About 40 primary dealers, mostly securities firms and large banks, buy securities directly from the Federal Reserve Bank of New York. These dealers are required to be credit-worthy and to help keep the market liquid by buying and selling in volume. Seven "screen brokers" operate the computer systems that allow primary dealers to trade securities with each other anonymously. The term "screen broker" comes from the CRT display screens upon which these brokers show the bid and offer prices for securities.
The primary dealers sell to a "secondary market" comprised of large institutional investors and more than 1000 secondary dealers who do much of the reselling of securities to smaller investors. Trading in the secondary market occurs worldwide, 24 hours a day, in which deals are made on the telephone. Customers include financial institutions, state and local governments, and individuals.
In a typical transaction, an investor telephones his or her broker, who is a secondary dealer, to make an offer for purchase or bid for sale of a particular issue. The secondary dealer/broker then telephones one of the primary dealers to enter the offer or bid. If the primary dealer cannot satisfy the bid or offer from inventory, then the dealer telephones one of the screen brokers to enter the offer or bid. The screen broker then reviews previously received offers and bids from other primary dealers, and attempts to match a previous offer with the newly-received bid or a previous bid with a newly-received offer. When a match is made, the screen broker contacts the transacting primary dealers to consummate the transaction. The primary dealer contacts the secondary dealer who, in turn, contacts the investor.
Unfortunately, this transaction system is limited by human capacity for telephone communication. Presently, traders may commonly have 60 or more telephones at their workstations connected to brokers, dealers and investors, and up to 12 video display terminals each connected to one of the numerous screen brokers. Simultaneously the trader must communicate with such multiple parties, monitor orders, and communicate,with the markets to complete transactions. During active market operations, a trader's capacity to continuously process new transactions becomes severely strained.
The known prior art trading systems do not provide substantial local processing of data, so that a trader must view only information transmitted by the mainframe computer system. The prior art systems are not designed for easy interaction between the trader and the system.